Oct 5, 2023

Bitcoin (BTC)'s price briefly climbed above $28,000 as ether (ETH) is stabilizing from a multi day drop, and Avalanche's AVAX is climbing.

Video transcript

Bitcoin is holding steady as Ether is stabilizing from a multiday drop and avalanches. A VA X is climbing. Joining us now to discuss the crypto markets is innovating capital, general partner, Anthony Georgia. Welcome back, Anthony. Thanks for having me on. Always good to be here. Glad to see you again. So, you know, we, we saw this uh it it lackluster introduction of a uh of ETF S based on Ethereum Futures, Ether futures. Uh What do you think that ultimately tells the market? II I, is it just because it was futures based and everyone's potentially waiting for a spot ETF or is there something more sinister and more uh and darker for the crypto markets that basically the, the the ship has sailed in crypto? You know, I think any time there's a product introduced like this, there's always a little bit of, you know, pent up excitement leading into the introduction of one of these products hitting the market. Um And typically, it's, it's very rare to see, you know, the floodgates open and a tremendous amount of, of volume that's churning in. If you think about it, most individuals, institutions, investors who will have sought out crypto investing actively and exposure to certain digital assets have found ways to gain that exposure already. So I think that over the short term, there's, you know, it's not necessarily surprising that we've seen very little actual impact directly over the long term. I think that that's more of a testament to the broader increased demand that we'll see for these types of products. And you also touched on it briefly, um that, you know, these are obviously not spot settled and spot based. Um But on the flip side, we have continued to see positive news on the Bitcoin spot ETF um you even had Black R MD a couple of days ago saying that, you know, they suspected that the SEC would grant full approval within a couple of quarters. Um So I think that the market is viewing that with some positive sentiment. The, the reason I ask is because he here's the thing, the, the argument that we just need an ETF for exposure to, to allow uh portfolios that cannot trade in spot uh in spot currencies directly and spot crypto directly, they can't buy for their portfolios. They can't go into coin base, let's say, and buy it and put in their portfolios. But for regulatory reasons, but here's an ETF packaged for them, nine of them packaged for them to buy. And they just sort of said we don't care, they are highly correlated with the spot market. We could say, well, it's not exactly, there are two different futures contracts. They, they, they're, they're settled there, et cetera. But at the end of the day, if I look at a chart of any of these ETF S and I look at the price of, of ether itself, the spot market, they're gonna go pretty much in tandem. Uh, it, it, it's going to look very similar. Does this kind of, are we overestimating the importance of an ETF in general for the spot market? Well, you know, to your point, right, the futures based ETF S don't necessarily always drive spot um whatsoever, right? So the other thing to keep in mind is in terms of the interest on day one, I need an ETF to gain exposure and, you know, once an ETF is approved, I'm gonna add it to my portfolio immediately. There's obviously a massive fall in that. Um it takes obviously several months to get any sort of ETF approved um for actual placement once their ETF product is on the market and then from there, there's obviously the consistent portfolio, recycling portfolio management and a variety of other factors at play. Um So I don't necessarily disagree with what you're saying though. I do think that the market sentiment and news around it has potentially been overblown in terms of its impact in the short and medium term. As I mentioned, I think the vast majority of demand has found its way into the market already today. Um And I think that at some point in time, you know, specifically a few years ago when the Bitcoin ETF S were first coming to market and a lot of these Bitcoin futures products were coming to market, the market had a difficult time adequately pricing in what that incremental demand would do to the broader supply demand dynamics of the digital asset pricing. Anthony. It seems like the market is just not moving though. We had positive ripple news come out yesterday. You mentioned some positive uh remarks from Black Rock about the spot ETF S but the market is just kind of staying the same. What are your predictions for the next uh support and resistance levels for Bitcoin? And what do you think is going to get us there? Mhm Bitcoin is facing a, you know, interesting um dichotomy right now on a global scale, Bitcoin continues to really serve, you know, if you look at a number of emerging markets um and third world markets around the world, Bitcoin continues to serve as a deflationary hedge and safe haven asset which has continued to provide for a lot of the incremental and you know, normalized demand um in the market on a week to week basis. Whereas on the flip side, if you look at where we are in a lot of the established economies around the world, digital asset prices are continuing to be tied towards more speculative assets. Um as we alluded to, there is a high degree of overall correlation with some of those more risk on assets which are of course, a lot more sensitive to changes in dynamics and monetary policy. Um So, you know, I think with those two almost contrasting factors at play, I think that obviously the latter has more of a weighting in terms of the digital asset pricing. But I think that, you know, really what we're continuing to be mindful of is obviously the the broader outlook um in monetary policy today, as well as some of the regulatory aspects at play here. And it wouldn't surprise me if we saw both of those variables work in our favor in the next, you know, 12 to 18 months where we have some reversal in monetary policy, we have easing and regulation and we also have continued demand on a global scale for this product to serve not as a speculative asset, but something that's more of akin to a digital gold of sort. Uh Just quickly we've spent a lot of time talking about this. Um FTX trial, does this matter for the market like at all or is it just completely a separate thing? You know, it's, it's completely a separate thing. FTX. I think what people, you know, tend to not necessarily discern is that FTX really has nothing to do directly with crypto. This is a web two financial company that obviously happens to transact in digital assets. And cryptocurrencies, but it has nothing to do with the underlying technology or fundamentals or really use cases themselves of digital assets and this type of, you know, fraud manipulation, uh misappropriation negligence, whatever you wanna call it has occurred in markets and financial products since you know, the beginning of time. All right, Anthony, we are going to have to leave it there. Thanks so much for joining us this morning. Great, good to see you. That was innovating capital, general partner, Anthony Georgia.

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